http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20World%20News&s1=blk&tp=ad_topright_topworld&refer=topworld&T=markets_bfgcgi_content99.ht&s2=blk&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=AOj6tKBZrQnVzaCBN

12/18 19:34

Bush Meets With Greenspan and Potential Treasury Head (Update4)

By David Ward, David Morris and Richard Keil

Washington, Dec. 18 (Bloomberg) -- President-elect George W. Bush expressed confidence in Alan Greenspan after a 45-minute breakfast meeting with the Federal Reserve chairman, then set about meeting with congressional leaders and interviewing potential Cabinet members.

As Bush made the rounds of the capital, the Electoral College ratified his election as the nation's 43rd president. Bush's day included lunch with Alcoa Inc.'s retiring chairman Paul O'Neill, a top candidate for Treasury secretary, and a meeting with former Senator Dan Coats, a top contender for defense secretary, senior Bush aides said.

``I talked with a good man right here,'' Bush told reporters after his meeting with Greenspan. ``We had a very strong discussion about my confidence in his abilities.''

The session at the Madison Hotel included Vice President- elect Dick Cheney, economic adviser Lawrence Lindsey and Bush's chief of staff Andrew Card. Much of Bush's schedule was focused on economic issues, including meetings with the Republican and Democratic leaders in the U.S. Congress.

Bush told Greenspan and congressional leaders that the U.S. may be headed toward an energy crisis that could damage the economy, spokesman Ari Fleischer said.

Warning on Energy

``There is a growing sense that something big needs to be done to protect America from an energy crisis,'' Fleischer told reporters. He said Bush would spell out his energy program at an unspecified later date.

Bush met last night with French President Jacques Chirac, who is in Washington for a regular meeting between the European Union and the U.S. Neither man made any comment on their discussions. Bush is scheduled to meet separately tomorrow with Vice President Al Gore, his opponent in the recent election, and with President Bill Clinton.

Bush's meeting with O'Neill was the first session Bush had in the capital with someone outside current government or political leadership circles. The Alcoa executive has emerged as Bush's leading choice for Treasury Secretary, a senior Bush adviser said.

The Bush adviser also said that Lindsey, who provided economic advice throughout the campaign, is Bush's first choice to be the president's chief economic adviser. No timetable has been set for that appointment, the official said.

One of the economic issues attended to by Bush was trying to build support in Congress for his $1.3 trillion, 10-year tax cut proposal, the centerpiece of his campaign for the White House.

``A potential economic downturn is perhaps more real today than a year ago,'' Bush told reporters after meeting with congressional leaders. ``Marginal rate reductions will help spur economic activity and economic growth.''

Purpose for the Surplus

Bush did not say whether he discussed the tax plan with Greenspan, and the Fed chairman didn't make any statement after the meeting. Greenspan has repeatedly said he'd rather see U.S. government budget surpluses be used to pay down the $3 trillion in publicly traded debt, though he'd support tax cuts before spending increases.

Bush's meetings with congressional leaders produced talk of compromise from Democrats.

``We will be there coming 50 percent of the way, sometimes a little further, to the middle to get things done for the people who hired us,'' House Minority Leader Dick Gephardt said.

Senate Minority Leader Tom Daschle said that while challenges lie ahead, Bush's election creates ``an opportunity to wipe the slate clean'' and work to find common legislative ground.

With the power balance in the Senate split 50-50 between Republicans and Democrats and Republicans holding a 10-vote edge in the House of Representatives, Bush indicated he knew it won't be easy to move his agenda. In particular, his tax plan has drawn skeptical comments from some Republicans as well as Democrats.

`Gentle Arm-Twisting'

``There's going to be a lot of discussions, a lot of head- knocking, a lot of gentle arm-twisting to reach what's right for America,'' Bush said.

``I believe that I'm standing here because I campaigned on issues (like) tax reform, education, medical care, and social security,'' Bush said after meeting with congressional leaders.

Bush's plan would reduce the number of tax brackets from five to four and cut marginal rates for all taxpayers. Lower-income filers would see the greatest percentage reductions, but the wealthiest 1 percent of all taxpayers would reap more than 40 percent of all the benefit of Bush's plan.

Bush will be inaugurated Jan. 20 and is moving ahead on staff and Cabinet choices. Over the weekend he named retired General Colin Powell as his choice for secretary of state and Stanford professor Condoleezza Rice as his national security adviser.

In addition to lunching with O'Neill, the president-elect was to meet with former Indiana Senator Coats. Coats, who retired from Congress in 1998 after eight years in the U.S. Senate and 10 in the House, is a top choice for secretary of defense, Mississippi Senator Trent Lott, the Senate majority leader said yesterday.

News that O'Neill is a top contender for the Treasury Post and was first reported in today's editions of The New York Times.

O'Neill, 64, who has a master's degree in public administration from Indiana University and has done graduate work in economics, and also has prior government experience.

O'Neill worked for the Office of Management and Budget from 1969 to 1977 and was deputy director in his last three years at the White House agency, which helps the president prepare the federal budget and formulate spending plans.

Bush's transition team had no public comment about the meetings with O'Neill and Coats.

``The president-elect has asked me not to engage in any speculation about who he may be meeting with,'' Fleischer said. He also warned that a meeting between Bush and a potential Cabinet member ``is not a sure-fire indication that he'll hire that person.''

In the capitals of the 50 states, meanwhile, the electors went about their traditional role of ratifying the national presidential results. As expected, Bush was awarded 271 votes in the Electoral College, four more than Gore. That despite the fact that Gore beat Bush by more than 330,000 votes nationwide

Usually, the votes of the electors are cast with little notice. This election was different, however, because of the closeness of the race and the month-long dispute over the vote results in Florida.

Each state gets a number of electoral votes proportionate to its population. Except for Maine and Nebraska, each state's votes are awarded on a winner-take-all basis.

-- (M@rket.trends), December 18, 2000